This section will discuss three responding steps namely detection, discovery, and recovery included in the maritime disruption management of senior managers in the wheat supply chain. The intention is to explore and assess how effective their responses when maritime disruptions occurred.
5.5.1 The detection period of maritime disruptive events
A major factor in determining the course of actions by entities in the supply chain disruption management (as suggested in Elkins et al. 2008) is the degree of understanding and detection of behaviours demonstrated when disruptions develop in the chain. Through the survey, it was confirmed that 54.8 per cent of respondents detected maritime disruptive events when significant delays happened in their own service operations (see Appendix G section R). Moreover, another 23.8 per cent of survey respondents stated that they had detected maritime disruptions when significant deviations occurred from previous plans, and 21.4 per cent of the remaining detected disruption when partial services of other stages along the wheat supply chain (before and after their location) were inactive. This result suggests the majority of respondents had the ability to detect the disruptions from the delay stage to the stages of deviation
and stoppage of services and subsequently may control the impact of the maritime disruption. The quotation below gives one example of this indication:
Delays are events that our team here in this operational division have to be aware of and respond to detect maritime disruptions as you mentioned as soon as possible, so the severe negative consequences mainly on our target and performance may be minimised to an acceptable level.
-Port Manager in Indonesia
5.5.2 Approach to discovering maritime disruptive events
Of 34 respondents, 44.7 per cent rated their transactional relationship with other entities as being beneficial to them because of the significant information they receive in relation to various risks in the wheat supply chain (see Appendix G section M). Other large sources providing an indication on supply chain risks including for those events in maritime operations were news from findings within the organisation (23.4 per cent) and historical data or past experience (12.8 per cent).
Particular concerns about discovering disruptive events were information through operation problems (10.6 per cent) and from industrial association (8.5 per cent). These percentages suggest that the majority of the supply chain behaviours occur based on reactions to external events where strategies and decisions were exercised depending on the inputs of the partners in the wheat supply chain. These behaviours are quite unexpected whilst the ability of respondents to detect disruptions was generally accepted, it was surprising to realise that their reactions are dependent on external parties. Others indicated that reactions were executed based on the severe forms of maritime disruption that were prevalent in the supply chain. It means that the fundamental reactions of respondents in managing disruptions are based on how large the negative commercial impact would be on their organisation. This provides further support for the mitigation of maritime disruptions.
5.5.3 Maritime disruption recovery actions
At least two steps were confirmed in the recovery of maritime disruptions in the Australian-Indonesian wheat supply chain namely undertaking immediate action, and
revaluating emergency plans. Actions reported in the maritime disruption survey were coordinated actions with supply chain partners, establishment of an immediate replacement program for breakdown equipment, utilising back-up facilities, and allocating emergency funds to support various recovery actions.
Two important decisions mentioned in relation to the physical component or equipment by the majority of ports and shipping operators in implementing recovery actions were firstly to have equipment functioning as soon as possible and secondly to recover their service operations. In relation to actions taken to recover their handling services, two respondents explained that:
Three things we took as our urgent actions at that time. Firstly, was to hire or to request similar equipment from our central office. Secondly, while waiting for the delivery of similar equipment, we tried to undertake retrofitting and replacement programs for our handling equipment such as cranes, conveyers and other lifting equipments as our high priority decision
was to recover our handling system immediately.
- Terminal Manager in Indonesia
When the earthquake occurred in our port, some areas of port infrastructure were damaged such as the access road to port, damage of our grain unloader unit as well as the storage buildings and consequently interrupted our port services for one month. Due to this we had to re- arrange our temporary service stage especially a new route to port and temporary storage areas and inform our grain shippers and consignees. And after two months, we started operating again.
- Port Branch Manager in Indonesia
The actions for each step and their positive outcomes will depend on the collaboration and support of maritime community entities. Due to this, respondents suggest that contingency plans at a port community scale or even for in an entire supply chain are required to significantly reduce the loss of users and stakeholders. One respondent confirmed this by arguing that:
Collaboration with all port entities is a substantial endeavour. As the reason for our last port stoppage was due to natural forces, therefore port users were aware of this accident and understood about the situation. I also heard some complaints about our slow response in recovering from the situation on the first day after the earthquake. But later on in that day we received some support and inputs from shipping operators and dry bulk terminal operators from other companies to replace the damaged handling
equipment. For roads that were exposed to high levels of damaged were rerouted to access road of our other partners in the same district. From this experience, I realised and should say that having and preparing a contingency plan for the entire port and maritime community together in the future is an essential initiative to be proposed for us here.
- Port Branch Manager in Indonesia
In addition, respondents re-evaluated their contingency plans but did not redesign the network and supply chain processes as suggested by the literature. Almost 28 per cent of respondents had experienced recovery actions along the chain as they had to deal with maritime disruptions starting from the time when the disruptions were detected until the time when recovery phase was completed. The majority of respondents experienced an understanding of re-evaluating the previous disruption risks by developing general incident cycles including estimating the consequences to benefit decision making when future disruptions occur.
A proactive decision making process by respondents in their companies based on a contingency plan was repeatedly used in relation to the risk management of various maritime disruptive events. Frequently this was still the case with decisions that were mostly not associated with a high degree of uncertainty. Three respondents supported this by commenting that:
We always applied the contingency procedures set up by our mother company (central office) whenever operational risks occurred that partially
or completely related to our negligence.
-Port Manager in Indonesia
Procedures of reporting, risk assessment based on risk matrix indicators, risk sharing responses, executing and monitoring processes were keys related to the risk actions that we performed.
- Shipping Manager in Indonesia
We estimate the potential consequences or losses that we could incur, provide some scenarios and discuss with the Board of Directors in terms of the best decision option that we can determine. …but we sometimes were really unsure of taking that [certain action] on so on the one hand we are anxious that we didn’t have enough responsibility in decision making but on the other we actually, at every opportunity, we could get sorted it out.
When operational and commercial uncertainty along the wheat supply chain due to maritime disruptions occurred, there was also a reliance on others, particularly market agents, buyers, sellers and other related service users to provide considerations in the decision making process, particularly on the risk management process. For example, two respondents confirmed that:
We decided to top up our wheat product at certain ports or terminals due to
information we got from our partners either carriers or sellers.
- Grain Supply Manager in Indonesia
The decision to reroute the loading or unloading ports usually relied on information or input from our marketing agent or our sellers. Our shipping
team will adjust their planning to the new shipment arrangement.
-Supply Chain Manager in Indonesia
The need to comply with the established practices or guidelines for maritime disruptions was evident. However, consideration of how past experiences underpinned established contingency plans or guidelines was not well articulated and how practice applied to special maritime disruptive events was not routinely expressed in the risk management system of respondents. Two respondents discussed these common responses when delays or deviations occurred due to congestion problems:
We used to deal with our customers when interruptions such as delays or disturbances due to congestion problems occurred at a certain port. But it was not really the standard risk protocol that we have been applying. The common procedure if we had such events was dealing with insurance or establishing better coordination with the port authority and operators.
- Dry Shipping Manager in Indonesia
As we become more experienced in making decisions, and we think what we are, is as part of our risk assessment….However, we found that coordination and flexible strategies were still essential decisions as we think that the probability of maritime risks was relatively low unless there is evidence that the prevalence of maritime disruptions is relatively high or something to worry about then we will formally include it in our contingency plan.
- Distribution Manager in Australia
Through the general maritime disruption management process applied by respondents above, subsidiary research question two (SRQ2) of this study can be partially addressed and explored. The findings through the telephone survey are evidence that shippers and consignees in the wheat supply chain are applying supply chain risk
assessment as their mitigation strategies to minimise the maritime disruptions between Australia and Indonesia.